Riceland Foods reported at its annual meeting in Stuttgart Thursday that sales and revenue topped the billion-dollar mark for the fifth consecutive year.

The 92nd Annual Riceland Foods Membership Meeting was held at the Grand Prairie Center.

Danny Kennedy, president and chief executive officer of the farmer-owned cooperative, said sales during 2011-12 were $1.16 billion, and distributions to farmers were $675 million. Member equity stands at $254 million, up $7 million from a year ago.

Riceland’s seasonal pool for long grain rice returned a gross payment that averaged $7.12 per bushel, including freight, storage and interest. The long grain pool provided a $1.09 per bushel premium over USDA’s national average price for long grain rice. Riceland’s medium grain rice seasonal pool returned a gross payment that averaged $6.82 per bushel, Kennedy said.

The cooperative’s soybean seasonal pool earned farmers $12.84 per bushel. With USDA’s national average price for soybeans at $12.45 per bushel, the Riceland soybean pool paid a premium of 39 cents per bushel.

Kennedy addressed the future of the rice industry and the long-term outlook for U.S. rice. He said that in many cases, rice is being viewed based on the recent performance of corn and soybeans. He said the question is, will it continue?

The answer begins, he said, when one considers the population growth. Today’s world population of 6.8 billion people is expected to grow to 9.1 billion by the year 2050. About half of the earth’s population consumes rice as a primary component of their diet.

“Do the math,” he advised. “World rice consumption will continue to increase in order to feed the expanding population.”

Kennedy said farm and trade policy was a key factor in driving U.S. rice market success. Farm policy and trade policy must go hand-in-hand. Other rice exporting countries continue to support prices of rice and other crops for their farmers at levels much higher than the U.S., he said.

“It is important to work on trade initiatives that not only promote free trade, but also fair trade,” he said.

The decline in the number of farm and rural voters, an increase in the number of people in Congress without rural backgrounds, and more people competing for fewer budget dollars have combined to make good farm policy difficult to achieve.

The farm community must strongly support members of the House and Senate Agriculture Committees who understand the needs of Southern agriculture and encourage supportive Members to build alliances with other Members of Congress.

Riceland’s 2012 Initiatives

Kennedy said Riceland introduced several initiatives during the past year that benefit farmers. One of the initiatives was the designation of four Commodity Marketing Specialists who would be available to work with farmers to explain the marketing opportunities available through the cooperative.

Page 2 of 2 - Fred Black, Riceland’s commodity marketing specialist for Southeast Arkansas, said, “There is a new generation of young farmers, and the co-op is committed to grow with them. He said he understands the importance of service to Riceland’s farmer-members because he is one.

“Each farming operation is unique from the crop mix that is grown, the varieties that are planted, the equipment used and everyday farming practices which are employed on the farm,” Black said.

He said that while the cooperative’s seasonal pool continues to be the most popular marketing option for Riceland members, that not all farmers know Riceland also offers self-pricing opportunities such as booking contracts, hedge-to-arrive contracts and members cash purchases.

With the increasing popularity of on-farm storage, Riceland is exploring new technologies that are available to help monitor the drying and storage of rice in farm storage bins. A program called “Bin Ready” is under development that will offer Riceland members the peace of mind that the condition of the grain in their farm bins is being monitored.

Another initiative for the year has been the development of the new website — www.Riceland.coop. The site provides Riceland members with one place to go for Riceland account information, markets, news and weather, Black said. “You can also view the truck line at any of our receiving locations with the website’s web cams.

“Two things make Riceland unique: our membership is open to all and we offer our members a reliable market for their crops,” he said. “Riceland brings the world market to our farmers’ individual operations.”

Market Outlook

Carl Brothers, Riceland senior vice president for marketing and risk management, said world rice stocks to use ratio continues in the narrow range and that a disruption in the production of any major exporting country could “result in fireworks in the market.”

He said that the disappointing quality of the 2010 crop created by excessive heat, and the increases in corn and soybean prices have kept U.S. rice acreage at 12-year lows. The smaller acreages and disappointing milling yields have supported long grain rice prices in the U.S.

Brothers said that prices also have been supported due to reduced export competition from South America and the Thailand rough rice scheme where the government has paid farmers high prices for rice and removed rice from the market.

While the U.S. rice industry has worked to open the Chinese market to U.S. rice, China’s phyto sanitary protocol is onerous. On the other hand, the Colombia free trade agreement has provided for the successful development of a Colombia Tariff Rate Quota (TRQ) program that is resulting in new sales of U.S. rice to the Central American nation.